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What are the odds?

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Anonymous
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What are the odds?

First of all, thanks in advance to all who take the time to answer any or all of my question.  My financial details are below.  I tried to be as thorough as possible.

 

43K Annual Salary

3 yrs on current job (7 total years in current industry with no break in employment)

Discover CC 1700 Bal/2500 CL ~$35/mo. payment

Car Loan 1500/Bal @ $345/mo. payment

Student Loans  ~$42,000 Bal. $250/mo payment (in grad school, currently in deferrment) 

 

Current Credit Scores (low, but on the steady incline due to recent payoff of older debt)  EQ 612 (FICO)  TU 605 (FICO)  Just got these suckers today from myfico.com.

 

My credit files have charge-offs (all PIF) and late payments.  There have been no late payments in the last six months or so.    

 

I want to buy a new house in the $70K-$90K range within the next 4-6 months.  I'm assuming FHA will be my best bet, as I'll only have enough downpayment for about 3.5%.

 

Here is my multi-part question:

 

1.  Given my low scores, will I even qualify for a loan at this point?

 

2.  Given my financial situation, are there any national lenders I should consider?

 

3.  If it is likely that I qualify, what kind of interest rate am I looking at?

 

4.  To qualify for pre-approval, will need money for a potential downpayment in my savings/checking accounts up front?  Or, do I just need to show proof of that during actual application process once I find the house I want?

 

Any insight is much appreciated.  Thanks a bunch!

 

--impossibleisnada

 

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1 REPLY 1
Anonymous
Not applicable

Re: What are the odds?

Generally you need 620 scores and a year of clean credit first off.  Once you have them you are at the first step.

 

For FHA, rate will not matter if you get to 620 score (although there are cases that FHA lenders are moving towards 640-660 minimum FICO)

 

As far as down payment, the depends upon the lender.  Alot of lenders do not want to see you still saving just to hit the minimum down payment up until closing so will want to see the money in your saving account and seasoned.  They worry you might either not get enough, or you might cut some financial corners (like not apying some bills at the last minute) to hit the magic number and that the consequences of that will catch up in a month or two.  Also, not being able to put aside 3.5% makes the UW worry about how you are going to deal with emergencies, etc.

 

One thing to note, with all of the general "rules" you can find banks that may or may not require them.  The key is though that the banks that tend to not follow the norms also often have deal denied at the last minute, charge higher fees, or lead buyers on hoping that they will tae care of issues prior to close.  So just be carefull if you start searching for lenders based upon who will approve you verses who is a reputable lender.

 

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